The
cryptocurrency
space
faced
a
turbulent
second
quarter,
with
roughly
$572.68
million
lost
to
hacks
and
scams,
marking
a
significant
increase
from
previous
periods.

This
loss
surge
represents
a
70.3%
rise
from
the
first
quarter
and
an
alarming
112%
increase
year-over-year,
illustrating
a
growing
trend
in

 

digital
asset
vulnerability.

Analyzing
Major
Incidents
And
Security
Failures

Data
from
the
web3
bug
bounty
and
security
services
platform
Immunefi
paints
a
grim
picture
of
the
current
state
of

crypto
security,
emphasizing
the
urgent
need
for
enhanced
protective
measures
across
the
industry.

Notably,
centralized
finance
(CeFi)
platforms
bore
the
brunt
of
these
attacks,
accounting
for
70%
of
the
total
losses.
This
shift
indicates
a
troubling
trend
as
attackers
increasingly

target
these
institutions
over
decentralized
finance
(DeFi)
networks,
which
were
previously
more
affected.

The
largest
incidents
included
a
$305
million
exploit
of
the
Japanese
cryptocurrency
trading
platform
DMM
Bitcoin
and
a
$55
million
theft
from
the
Turkish
crypto
exchange
BtcTurk.

Furthermore,
May
emerged
as
the
most
challenging
month
of
the
quarter,
witnessing
the
highest
losses
at
$358.5
million.
Despite
these
substantial
financial
damages,
there
were

 

minor
victories,
such
as
the
recovery
of
$28.7
million,
which
accounted
for
only
5%
of
the
total
stolen
in
Q2.

These
recoveries
occurred
across
four
notable
exploits:
Bloom,
ALEX
Lab,
Gala
Games,
and
YOLO
Games.
Mitchell
Amador,
founder
and
CEO
of
Immunefi,
highlighted
the
“devastating”
impact
of
infrastructure
compromises,
noting
that
such
breaches
could
lead
to
significant
financial
losses,
especially
when
CeFi
infrastructure
is
involved.

The
predominant
loss
mode
was
via
hacks,
representing
98.5%
of
the
total
financial
damages
across
53
incidents.
In
contrast,
fraud,
scams,
and
rug
pulls
accounted
for
a
mere
1.5%
of
the
losses
but
occurred
in
19
incidents.

This
disparity
points
to
the
technical
complexity
and
scale
of
hacks
compared
to
traditional
deceitful
practices
within
the
crypto
sector.

 

Targeted
Networks
And
Emerging
Threats

Ethereum
and
BNB
Chain
were
the
most

targeted
networks
during
the
quarter,
continuing
the
trend
from
Q1.
Ethereum
experienced
the
highest
number
of
individual
attacks,
with
34
incidents
accounting
for
46.6%
of
the
total
losses
on
chains,
followed
by
BNB
Chain
with
18
incidents.

This
targeted
aggression
towards
prominent
networks
highlights
the
need
for
ongoing
vigilance
and
enhanced
security
protocols
within
these
ecosystems.

In
addition
to
these
direct
financial
threats,
the
rise
of
deep
fake
technology
presents
a
new
frontier
in
crypto-related
scams.
Bitget
Research
has
recently

projected
that
losses
due
to
deep
fake
scams
could
soar
to
over
$25
billion
by
2024.

Have
you
ever
been
caught
up
in
a
crypto
deepfake
scam?

Bitget
Research
just
released
a
report
highlighting
that
Deepfakes
may
reach
70%
of
crypto
crimes
in
two
years
and
annual
losses
caused
by
crypto
deepfakes
may
reach
$25.13
billion
by
the
end
of
2024.

pic.twitter.com/xnwj7xFLOy

—
Bitget
(@bitgetglobal)

June
27,
2024

These
sophisticated
schemes
often
utilize
fake
projects,
phishing
attacks,
and
Ponzi
schemes,
exploiting
deep
fake
technology
to
create
an
illusion
of
credibility
and
mislead
investors.

Featured
image
created
with
DALL-E,
Chart
from
TradingView

Go to Source
Author: Samuel Edyme

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